Nacchio Archive

Supreme Court won't hear Nacchio appeal

The Supreme Court refuses to hear the ex-Qwest CEO's appeal of his conviction.

By Andy Vuong The Denver Post

Posted:
10/06/2009 01:00:00 AM MDT

Updated:
10/06/2009 02:12:55 AM MDT

Joe Nacchio and his wife Anne, leaves the federal courthouse in downtown Denver, Thursday, April 19, 2007. The former Qwest Communications chief executive was found guilty on some of the charges against him. PHOTO BY CRAIG WALKER /DENVER POST ( | CRAIG F. WALKER)

The U.S. Supreme Court on Monday rejected former Qwest chief executive Joe Nacchio's request for a review of his insider-trading conviction.

Issued without comment, the decision is a major blow to Nacchio's efforts to overturn the conviction but doesn't end his legal battles. He has a resentencing and a motion for a new trial pending in U.S. District Court in Denver.

The high-court ruling does, however, allow Qwest to try to recoup some of the legal fees the Denver company was required to pay for Nacchio's defense under its corporate bylaws and contract clauses.

Nacchio, 60, began serving a six-year term in April at a federal prison camp in Pennsylvania. His attorney, Maureen Mahoney, said Monday she was disappointed by the Supreme Court's decision.

"I am convinced that he is innocent and did not receive a fair trial," Mahoney said.

Shareholders rejoice

Qwest shareholders, many who blame Nacchio for thousands of dollars in retirement losses, were delighted.

"Fantastic," said Kathy Ticha, 65, who retired from Qwest in August 2001. "He doesn't deserve a new trial."

The Loveland resident estimates she lost $60,000 in her 401(k) because of Nacchio. With the one-time Wall Street darling at the helm, Qwest went through sensational growth but nearly collapsed into bankruptcy at the end of his five-year tenure in 2002.

"Every time I look at my 401(k), it just makes me angry," Ticha said.

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Nacchio was convicted in 2007 on 19 counts of illegal insider trading connected to his sale of $52 million in Qwest stock. Prosecutors said he sold the shares in early 2001 based on insider information that the company was deteriorating financially and would miss publicly stated earnings forecasts.

A three-judge federal appeals panel awarded him a new trial in 2008, ruling that expert testimony from a defense witness was improperly excluded. But the full appeals court tossed out that ruling and upheld the conviction in a 5-4 decision this year.

New-trial request pending

In the Supreme Court petition, Nacchio's attorneys again argued that defense testimony was wrongfully barred and that instructions given to jurors were flawed. They also said there weren't established standards to assess the materiality of earnings forecasts as it related to insider-trading charges.

The high court, which considered Nacchio's request Sept. 29, does not generally state reasons for rejecting petitions.

In July, the appeals panel that granted Nacchio a new trial awarded him a new sentence, ruling that trial Judge Edward Nottingham miscalculated when he ordered Nacchio to serve six years in prison and pay $71 million in fines and forfeitures. The panel suggested that the sentence was excessive.

A resentencing hearing has not been scheduled.

Also pending is a request Nacchio filed in March for a new trial because of newly discovered evidence. The motion contends former Qwest chief financial officer Robin Szeliga's testimony in a deposition in an ongoing civil case differs from testimony she gave in Nacchio's 2007 trial as a key prosecution witness.

WATCH Nacchio at 1/5/01 all-hands meeting. "The challenge for us is how quick we come out of the box in 2001 in the face of what looks like somewhat of a slowing economy. ... The first quarter for us and the second quarter for us, absolutely critical. ... You've got to meet your objectives really early this year." Run time: 1:28.

WATCH Nacchio at 1/5/01 all-hands meeting. "After we fix service, the most important thing we do is meet our numbers ... we stop everything else when we don't make the numbers." Run time: 1:14

WATCH Group leader presentations at leadership conference. Nacchio speaks at beginning, end. Run time: 1:04:16 "We are not the same company today that we were two weeks ago ... We have to bury the dead ... This is not your father's Oldsmobile," at 59:50.

WATCH Nacchio at 1/5/01 All Hands Meeting. "The next four weeks are very important. You hit your early numbers ..." at 4:55. Run time 15:24